How data brokers hurt your bottom line (part 1)
Finding affordable business products is hard, especially when you're a small business. If you ever wonder why certain products are so expensive or why you can’t seem to access services that larger companies use, this article is for you.
For the same services, providers charge you higher prices than what they charge large companies to compensate for inefficiencies they face in finding and underwriting small businesses. The first part of the problem has to do with data. In particular, small business data is both expensive and unreliable.
Small business data is expensive
Sourcing accurate data from small businesses is difficult. When companies that offer business products (enterprise providers) need to learn about you, they don’t have many places to go. As such, with little to no competition, data brokers (companies that gather information about your business) can charge enterprise providers a high price for your data. Right away, this increases the cost of selling to businesses like yours, which means the chances you are offered a good deal are low.
Small business data is unreliable
Moreover, small business data is unreliable. For starters, there is a lack of coverage - many businesses are simply missing from third-party databases. And if your business does appear in a database, much of the information there will be vague, outdated, or irrelevant. As a result, enterprise providers either don’t trust the data they get and/or they don’t find it useful.
Currently, there are no reasonable solutions to this problem. Enterprise providers have to spend time verifying the accuracy of the data they get, and when that isn’t enough, they spend money to get their hands on even more data, hoping that some of it eventually turns out to be useful.
What does that mean for you as a small business owner? Unfortunately, the added costs of purchasing data from multiple sources and performing quality assurance on that data get passed down to you. Higher costs translate to higher prices.
This is unfair to business owners - small enterprises deserve to be on equal footing with large enterprises when it comes to business purchases. At Hansa, we are actively working to make that a reality. Don’t waste time and money trying to find business partners on your own - let Hansa do it for free.
If you want us to help, reach out to info@withhansa.com and tell us about your business. Schedule a free consultation at your earliest convenience!
Finding affordable business products is hard, especially when you're a small business. If you ever wonder why certain products are so expensive or why you can’t seem to access services that larger companies use, this article is for you.
For the same services, providers charge you higher prices than what they charge large companies to compensate for inefficiencies they face in finding and underwriting small businesses. The first part of the problem has to do with data. In particular, small business data is both expensive and unreliable.
Small business data is expensive
Sourcing accurate data from small businesses is difficult. When companies that offer business products (enterprise providers) need to learn about you, they don’t have many places to go. As such, with little to no competition, data brokers (companies that gather information about your business) can charge enterprise providers a high price for your data. Right away, this increases the cost of selling to businesses like yours, which means the chances you are offered a good deal are low.
Small business data is unreliable
Moreover, small business data is unreliable. For starters, there is a lack of coverage - many businesses are simply missing from third-party databases. And if your business does appear in a database, much of the information there will be vague, outdated, or irrelevant. As a result, enterprise providers either don’t trust the data they get and/or they don’t find it useful.
Currently, there are no reasonable solutions to this problem. Enterprise providers have to spend time verifying the accuracy of the data they get, and when that isn’t enough, they spend money to get their hands on even more data, hoping that some of it eventually turns out to be useful.
What does that mean for you as a small business owner? Unfortunately, the added costs of purchasing data from multiple sources and performing quality assurance on that data get passed down to you. Higher costs translate to higher prices.
This is unfair to business owners - small enterprises deserve to be on equal footing with large enterprises when it comes to business purchases. At Hansa, we are actively working to make that a reality. Don’t waste time and money trying to find business partners on your own - let Hansa do it for free.
If you want us to help, reach out to info@withhansa.com and tell us about your business. Schedule a free consultation at your earliest convenience!
The rest of this article is exclusive content for Hansa members.
Thousands of other business owners just like yourself come to Hansa to level up their business.
Sign up below to get immediate access to this article as well as other premium content.
.svg)
Security Gurantee
Already have an account?
